Chapter 1 - Intro to Auto Insurance Flashcards Preview

Define precedent.

- is a legally enforceable decision made by a judge that will guide judges in making subsequent decisions in similar cases.

2

What are the 2 distinct legal system used in Canada?

1) Civil code of Quebec2) Common law (applies to rest of Canada)

3

How does the Civil code operate?

- general written law- courts in civil law system first look to the code as a basis for a decision, and then refer to previous court decisions for consistency- governs all auto insurance contracts (and all civil rights)- law that contains all basic provisions that govern life in society, namely the relationships among citizens and relationships between people and property

4

How does the Common Law operate?

- aka judge made law- originated in Great Britain- found only in past decisions- cannot be found in any code or legislation- is flexible and adaptable to changing circumstances- system based on precedent

5

What are the 3 levels of law in Canada?

- authority to MAKE laws is divided between1) Federal - Gov of Canada2) Provincial/Territorial gov3) Municipal/Locacl gov- can make bylaws dealing with a variety of local matters

- all 3 levels of gov have laws pertaining to the operation of autos

6

What does the federal legislation deal with?

- has several sections on driving offencesex) Section 220 - criminally negligent operation of a motor vehicleex) Section 253, 254, 255 - cover impaired driving, driving with more than 0.08 mg of alcohol in blood, and refusing to give a breath sample to a peace officerex) Other sections - provide penalties for motor vehicle related criminal offences such as vehicle theft, failure to stop at the scene of an accident, and dangerous driving- these offences are tried in courts and courts apply punishment- if insured driver is CONVICTED of offense, auto policy has exclusions to deny coverage (based on CONVICTION)

7

What does the Provincial legislation deal with?

- provinces & territories make laws in such areas as education, property, and health services- sets out the rules of the road which include speed limits, rules respecting traffic lights & stop signs, who has the right of way in various situations- auto insurance falls under provincial jurisdiction- insurance policy does not allow insurer to deny coverage unless there is an exclusion in policy

8

What does Municipal Bylaws deal with?

- can make bylaws dealing with local matters such as zoning, smoking, animal control, and issuance of construction permits- also enact crosswalk & parking bylaws, and set speed limits within their borders- generally not denied coverage under auto policy unless exclusion in policy- parking tickets don't affect premium

9

What occurred in 1770?

- French inventor, Nicolas-Joseph Cugnot, developed a vehicle that was propelled by steam produced in a large boiler that was suspended from the front of the vehicle- steam was the first means of locomotion

10

What occurred in 1831?

- in the British house of commons, a special committee reported that it considered the auto movement to be fully established- noted that prohibitive & excessive tolls were being charged on highways because of popular prejudice against strange new invention- law required that a man carried a red flag during the day, and red lantern at night must walk 100 yards in front of every auto

11

When did provinces enact mandatory conditions for auto policies?

- early 1920's- statutory conditions were the only thing that was the same in the polices- included specific obligations of both insured and insurer in event of an accident

- in early 1930's standard policy wordings were introduced- became mandatory canada wide- no fault AB (except for NWFD/Labrador)

12

How is auto insurance distributed in Canada?

1) Sold by private insurance companies which sell their products either:i) directly to the public - direct writers (state farm/ belair)ii) through brokers or agents selling on behalf of private companies - (RSA)

2) Sold by crown corporations set up by provincial gov (ICBC). These corps may sell their products:i) through brokers/agents (who also sell for private companies)ii) through own direct sales departmentiii) through other gov agencies (motor license offices)

13

How do government operated auto insurance work?

- Saskatchewan, Manitoba, BC- premium is paid annually when vehicle license plate is renewed- some cases a fee is charged when driver's license is renewed- no policy is issued, but a motor vehicle certificate of registration is issued

3) SPF 2 - standard auto policy (driver's form), provides coverage for drivers who are driving vehicles they do not own

4) OAP 2 - Ontario auto policy (driver's policy)

6) OAP 4 - Ontario auto policy (garage policy)

--------------------------------------------------------------------------New Ontario forms have not yet been released to replace:1) SPF 6 - standed non-owned auto policy coverage applies to a business entity when the business and its owners could be held legally liable for damages caused by a vehicle that they do not own

Define insured.

- first party- the party that is protected by the policy

18

Define insurer.

- second party- party that provides insurance

19

Define others.

- third party- refers to anyone else involved in a motor vehicle accident- there can be multiple third parties in any claim- third parties who make a claim for damages from an insured are called claimants.

20

What is proof of financial responsibility?

- is the ability to pay if responsible for causing BI/PD to another person through negligent operation of auto- is accomplished by having valid auto ins. liability policy that meet required min. limit- proof may be required to be filed either because of a conviction, or involvement in an accident while uninsured- may also be required with elderly or underage drivers- its possible to file proof of financial responsibility in some cases even if person doesn't own an auto but wishes to be licensed in a given province (by purchasing a drivers policy (OAP 2) - an non-owned auto coverage)- filing proof can be accomplished by an insurer submitting certificate with registrat of MV showing MV liability policy has been issued- insurer guarantees policy won't be cancelled without giving Reg of MV adequate notice

21

What is a pink card?

- serves as evidence of auto third party liability insurance- must be carried at all times

22

What info does the pink card contain?

1) name & address of insurer2) name & address of insured3) agency/brokerage name or number4) description of vehicle5) policy number (license plate # in provinces with full gov plans)6) effective date and expiry7) warnings of penalties for its misuse

23

Explain accident benefits.

- first introduced in 1960's in response to length of time to settle auto claims- no-fault basis- innocent third parties & at fault parties receive benefits while cases are settled